Authorities in Delhi on Monday closed schools, halted construction work and shut down a major power plant after days of choking smog led to warnings of a health "emergency" in the world's most polluted capital.

Pollution levels have spiked in recent days as farmers in neighbouring Indian states burn crop stubble after the harvest and temperatures cool, trapping pollutants in a smoggy haze over the city.

Delhi's air quality generally worsens with the onset of autumn, particularly after the Diwali festival when millions of revellers let off heavily polluting firecrackers.

But this year's change has been particularly dramatic, with the American embassy reporting hazardous pollution levels for several days running.

On Monday morning it put levels of PM2.5 -- the fine particles linked to higher rates of chronic bronchitis, lung cancer and heart disease -- at an off-the-charts 778.

Levels between 301 and 500 are classified as "hazardous", meaning everyone faces a risk of respiratory effects and should stay indoors, while levels above 500 are beyond the official index.

Manan Mahato, who drives an auto rickshaw in Delhi, said he had sent his children to his native village because he was worried about their health.

"It has become risky to stay in Delhi because of the pollution," he said, holding a handkerchief over his mouth because he cannot afford a proper face mask.

"I am sending my children back to the village as I am worried for their health. If it stays like this, I think this city won't be livable anymore."

On Sunday hundreds of people, many wearing face masks, gathered in central Delhi to demand immediate action to curb the pollution levels, currently around 30 times the World Health Organization's recommended PM2.5 safe limit of 25 micrograms per cubic metre of air.

'Emergency situation'

Indian teenagers play cricket in a park as heavy smog covers New Delhi, on November 7, 2016

(AFP)

Long queues formed outside shops selling face masks, a relatively new phenomenon in Delhi, as are the air purifiers that now feature in the homes of wealthy residents.

The Delhi government on Sunday announced a series of measures including shutting schools for three days, banning all construction work for five days and the temporary closure of a coal-fired power plant.

It also said it was considering cloud-seeding to produce rain, a technique Beijing used to clear the air ahead of the 2008 Olympic Games.

Anumita Roychowdhury, executive director at the Delhi-based Centre for Science and Environment, said the city faced an "emergency situation".

"These temporary emergency measures are critical for bringing down the peak pollution levels," she said.

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